October 10, 2025
ShareLoss of Value Insurance for College Athletes: Why Jake Butt Got $543,000 While Marqise Lee Got Nothing
Jake Butt won the Mackey Award as college football’s best tight end. Projected early second-round NFL draft pick. Tore his ACL in his final college game. Draft stock collapsed to late fifth round. His Loss of Value insurance paid out $543,000.
Marqise Lee was projected as a top-10 NFL draft pick. Suffered injuries that dropped him to the second round. His Loss of Value insurance denied his $5 million claim entirely based on alleged application misrepresentations unrelated to his actual injuries.
Same type of coverage. Catastrophic injuries tanking draft positions. One athlete receives financial protection. The other gets nothing and faces millions in lost earnings with zero insurance recovery.
The difference? Legal representation that understood how LOV insurance actually works, proper policy structuring, meticulous application completion, and attorneys who knew how to fight insurer denial tactics before purchasing coverage.
As attorneys and certified NFL agents who have negotiated over $15 million in NFL contracts and argued multiple injury grievances at the professional level, we’ve seen both outcomes repeatedly. The athletes who receive insurance payouts when injuries devastate their draft stock are those who had experienced legal counsel before purchasing coverage—not athletic compliance departments with zero insurance expertise advising them.
The Permanent Total Disability Requirement Nobody Explains
Here’s what most college athletes and their families don’t understand: you cannot purchase Loss of Value insurance without first qualifying for and purchasing Permanent Total Disability coverage. LOV functions as additional coverage layered onto PTD policies, not standalone protection.
PTD insurance pays if career-ending injuries prevent athletes from ever playing professional sports. LOV insurance pays when injuries drop draft positions but don’t end careers entirely—the gap between projected and actual draft earnings.
The Two-Policy Structure:
Athletes must first secure PTD coverage protecting against complete career-ending disability. Once PTD approval is obtained, insurers offer LOV as supplemental coverage protecting against draft position decline. Premium costs for combined PTD/LOV coverage range from $15,000 to $50,000 annually depending on sport, injury history, and projected draft position.
This two-tier structure creates complexity that athletic compliance departments routinely mishandle, resulting in coverage gaps, improper policy selection, or complete failure to secure appropriate protection.
The USC Catastrophe: When University Advice Destroys Financial Futures
Morgan Breslin and Marqise Lee both attended USC. Both were projected high NFL draft picks. Both suffered injuries affecting draft positions. Both had their insurance claims denied. Both received zero dollars despite purchasing coverage specifically designed to protect against exactly what happened to them.
USC’s athletic compliance department served as the primary advisor for both athletes’ insurance decisions. The compliance staff had no insurance law expertise, no experience negotiating policy terms, and no understanding of application pitfalls that create claim denial grounds.
Result: Gross failures in policy selection, application completion, and coverage structuring that left both athletes financially devastated when injuries struck. The university’s well-intentioned but completely unqualified compliance personnel cost these athletes millions in insurance recoveries they should have received.
This is why athletes need attorneys with real-world collegiate and NFL experience handling LOV insurance decisions—not athletic administrators with zero legal or insurance background making million-dollar coverage determinations.
Athletes Who Got Paid vs. Athletes Who Got Nothing
Successful Insurance Recoveries:
Jake Butt (Michigan, TE) – Mackey Award winner projected early second round. Tore ACL in final game. Drafted late fifth round. Insurance payout: $543,000. Bounced around NFL rosters and retired early due to recurring knee issues.
Ifo Ekpre-Olomu (Oregon, CB) – Projected first-round pick. Tore ACL before draft. Dropped to seventh round. Insurance payout: approximately $3 million.
Silas Redd (USC, RB) – Top three-round projection. Went undrafted after injury. Received LOV payout (amount undisclosed).
Insurance Denials and Missed Protection:
Willis McGahee (Miami, RB) – Projected top-5 pick. Suffered devastating knee injury in national championship game. Fell to bottom of first round (23rd overall). Never purchased LOV insurance. The 18-pick drop cost him millions in guaranteed money.
Marcus Lattimore (South Carolina, RB) – First-round potential after freshman and sophomore seasons. Catastrophic knee injury junior year. Fell to fourth round and never played in NFL. No PTD/LOV coverage. Financial safe-haven completely absent.
Jaylon Smith (Notre Dame, LB) – Projected top-5 pick. Suffered severe knee injury in final game of season. Fell to second round. Years of NFL roster instability and practice squad assignments. Career trajectory never matched pre-injury projections.
Michael Bush (Louisville, RB) – Top-half first-round projection as junior. Broke leg in season opener as senior. Drafted fourth round and never developed into projected talent.
Isaiah Austin (Baylor, Basketball) – Non-injury example demonstrating PTD importance. During pre-draft medical screening, genetic disorder (Marfan Syndrome) discovered. NBA career immediately ended based on diagnosis. Direct PTD coverage case where proper insurance would have provided financial protection.
The pattern is clear: athletes with proper legal guidance securing appropriate coverage receive payouts. Athletes relying on university compliance departments or purchasing coverage without legal review face denials or never obtain protection at all.
The Tax-Free Payout Strategy Most Athletes Miss
Standard LOV insurance purchased through NCAA Student Assistance Funds generates taxable income for athletes. Premium payments and claim proceeds both trigger tax obligations that dramatically reduce net insurance value.
The Tax-Free Structure: Athletes who purchase LOV/PTD policies individually and personally pay premiums receive tax-free claim proceeds. This requires securing premium financing through private donors, NIL collectives, or personal loans rather than using NCAA assistance funds.
Premium Financing Options:
- Private donor loans arranged before season starts
- NIL collective funding negotiated as part of athlete representation
- Family financing with repayment from professional contracts
- Specialized athlete premium loan programs (requiring careful legal review of interest rates and repayment terms)
Tax savings on million-dollar claim proceeds can exceed $300,000—making proper policy ownership structure critical to maximizing insurance value.
Most athletic compliance departments never discuss tax implications with athletes. Attorneys experienced in NIL representation and insurance structuring build tax-efficient ownership into coverage from the beginning, preserving maximum claim value.
NIL Economics: Why Playing Longer Makes Financial Sense
The NCAA NIL landscape transformed college athletics economics. Top college athletes now earn millions annually through Name, Image, and Likeness deals—income that continues while they remain in school and can be protected through proper insurance planning.
2025 NIL Valuation Reality:
- Total college football NIL payouts projected at $1.95 billion
- Top-100 NIL valuations average $861,000
- Top-10 athletes average $4 million annually
- Rankings 11-50 average $1.5-2.0 million
- Rankings 51-100 average $0.8-1.2 million
NFL Rookie Contract Comparison:
Xavier Watts, 96th overall pick in 2025 NFL Draft, signed a 4-year, $6.19 million contract with $1.14 million signing bonus—his only guaranteed money. Average annual salary: $1.55 million.
Bryant Wesco, sophomore at Clemson, 96th highest NIL earner: approximately $868,000 annually while still in college.
The Strategic Calculation: Elite college athletes can earn comparable or greater income remaining in college while building their brand, completing degrees, and protecting themselves with LOV/PTD insurance against career-ending injuries. NFL rookie contracts outside the top-50 picks offer limited guaranteed money and immediate physical risk.
Benefits of Extended College Career with LOV/PTD Protection:
Guaranteed Current Income – NIL deals pay today. Athletes can increase earnings for 1-2 additional years, leverage transfer portal opportunities to renegotiate collective payouts, and establish national endorsement partnerships. College stars often command larger brand recognition than NFL rookies.
Educational and Personal Development – Complete degrees, mature professionally, develop life skills beyond athletics. These benefits carry lifetime value beyond short-term earnings.
Increased Draft Stock – Strategic draft declaration timing matters enormously. Athletes can avoid loaded draft classes at their position, improve performance metrics, and enter drafts where their skill sets command premium valuations.
Decreased Insurance Risk with NIL Buffer – LOV/PTD insurance provides both upfront coverage and protection against career-altering injuries. Combined with guaranteed NIL income, athletes create financial cushions that don’t exist for players declaring early for professional drafts.
The Multi-Year Coverage Strategy
Athletes should purchase LOV/PTD coverage as sophomores or juniors—1-3 years before entering professional drafts. Early purchase provides critical advantages that waiting until senior year eliminates.
Early Purchase Benefits:
Pre-Existing Condition Protection – Injuries occurring after policy inception are covered. Athletes who wait until senior year to purchase coverage face exclusions for any injuries sustained during their entire college careers.
Lower Premium Costs – Younger athletes with less injury history qualify for better premium rates. Each additional year of college competition adds injury risk that increases premiums or triggers exclusions.
Extended Coverage Duration – Multi-year policies provide continuous protection rather than single-season coverage. Some insurers offer policy renewals if athletes defer draft entry.
Complete Medical Documentation – Building comprehensive, accurate medical files before college begins allows proper disclosure in insurance applications. Athletes with documented pre-college health histories avoid misrepresentation issues that destroy claims later.
Critical Timing Requirement: Policy inception dates must begin before the first game of the collegiate season. Coverage gaps between policy “confirmation” and official “inception” create claim denial opportunities for insurers when early-season injuries occur.
Standard Policy Duration: Most Lloyd’s-market LOV policies historically capped at 3 years from issuance or until age 23. Premium costs increase for extended coverage periods or if athletes sustain injuries during policy terms.
Scouting Service Manipulation: How Insurers Reduce Your Coverage
Insurers determine coverage amounts based on athletes’ projected draft positions using scouting services. The scouting service chosen dramatically affects available coverage and claim values.
NFL Scouting Service Landscape:
National Football Scouting (18 NFL teams subscribe):
Arizona Cardinals, Atlanta Falcons, Carolina Panthers, Cincinnati Bengals, Dallas Cowboys, Denver Broncos, Green Bay Packers, Houston Texans, Kansas City Chiefs, New Orleans Saints, New York Jets, Philadelphia Eagles, Los Angeles Rams, Los Angeles Chargers, San Francisco 49ers, Seattle Seahawks, Tampa Bay Buccaneers, Tennessee Titans
BLESTO (8 NFL teams subscribe):
Buffalo Bills, Detroit Lions, Jacksonville Jaguars, Miami Dolphins, Minnesota Vikings, New York Giants, Pittsburgh Steelers, Washington Commanders
Independent Scouting Operations (6 NFL teams use internal departments exclusively):
Baltimore Ravens, Chicago Bears, Cleveland Browns, Indianapolis Colts, Las Vegas Raiders, New England Patriots
The Manipulation: Insurers can cherry-pick scouting services that undervalue athletes’ true draft projections, reducing coverage amounts and limiting claim values. Some insurers use outdated services or weight less reputable public rankings (NFL.com, CBS Sports, ESPN) that don’t reflect actual NFL team evaluations.
Athletes need legal representation demanding insurers use National or BLESTO services—the actual scouting reports NFL teams rely on for draft decisions. Grading scales vary between services, and insurers exploit these variations to minimize their exposure.
The Application Trap: Creating Denial Grounds Before Coverage Begins
LOV/PTD insurance applications contain deliberately vague questions designed to create future claim denial justifications. Athletic compliance departments lack the legal expertise to navigate these traps, resulting in application responses that destroy coverage before athletes ever file claims.
Standard Application Land Mines:
“Have you ever received medical treatment for any condition affecting your knees, ankles, shoulders, back, or any other body part?”
College athletes receive constant medical attention. Routine trainer visits, precautionary imaging, preventive care, minor complaints mentioned to team physicians—all technically qualify as “medical treatment.” Insurers later claim any undisclosed treatment, however minor, constitutes material misrepresentation justifying policy rescission.
“Describe all symptoms, discomfort, or physical limitations you have experienced.”
This impossibly broad question traps athletes regardless of how they respond. Every athlete experiences symptoms and discomfort. But insurers claim any undisclosed minor issue—soreness mentioned to trainers, brief discomfort that resolved without treatment—proves misrepresentation warranting coverage denial.
Legal Standard: Insurers successfully deny claims by proving application misrepresentations completely unrelated to the actual injury claimed. The misrepresentation doesn’t need causal connection to the claim—it just needs to exist in the application.
Legal Representation Requirement: Attorneys guide athletes through applications ensuring complete disclosure while avoiding unnecessarily broad responses that create denial grounds. We document the entire application process proving proper disclosure and maintain records demonstrating good faith compliance.
Critical Policy Exclusions That Eliminate Coverage Value
Standard LOV/PTD policies contain exclusions that destroy coverage for the exact injuries college athletes most commonly suffer. Athletic compliance departments rarely understand these exclusions or negotiate their removal.
Body Part Exclusions – Policies exclude coverage for injuries to any body part the athlete previously injured or received treatment for. Given that serious college athletes receive medical attention for multiple body parts throughout their careers, these exclusions eliminate most meaningful coverage.
Cumulative Injury and Degenerative Process Exclusions – Insurers exclude coverage for injuries resulting from “cumulative trauma” or “degenerative processes”—vague terms allowing denial of most orthopedic injuries developing through athletic competition.
Pre-Existing Condition Exclusions – Policies define “pre-existing conditions” so broadly that virtually any injury can be characterized as relating to prior medical history.
The NCAA Recommendation: The NCAA advises athletes to negotiate removal of these exclusions. But athletes lack leverage without legal representation. We negotiate exclusion removal or modification as standard practice before clients commit to policies.
Our Combined Expertise: NFL Agent Experience Plus Insurance Litigation
As attorneys and certified NFL agents with combined experience negotiating over $15 million in player contracts, representing 20+ NFL and CFL roster players, and arguing multiple injury grievances and NFLPA arbitration matters, we understand both the professional sports landscape and insurance industry tactics.
Our Representation Includes:
Pre-Purchase Strategy – We evaluate draft projections using actual NFL scouting services, compare policies across multiple insurers, negotiate favorable terms, and structure tax-efficient ownership before athletes commit to coverage.
Application Guidance – We complete insurance applications ensuring proper disclosure without creating future denial grounds. We document the entire process proving good faith compliance.
NIL Integration – We represent athletes in NIL negotiations and integrate insurance planning with Name, Image, and Likeness income strategies, including premium financing through collectives and tax-efficient policy structuring.
Coverage Monitoring – Throughout policy periods, we maintain insurer communication, document injuries and treatments, and ensure compliance with policy requirements affecting future claims.
Claim Advocacy – When injuries occur, we immediately engage insurers with proper documentation, establish causal connections between injuries and draft position changes, and fight denial tactics using bad faith leverage.
Grievance and Arbitration Experience – Our NFL-level injury grievance experience informs our insurance strategy. We understand how professional teams, leagues, and insurers approach injury disputes and use that knowledge protecting college athletes.
High School NIL Representation – We represent high school athletes in NIL matters, allowing early insurance planning before college careers begin. Top high school players typically become top college players—the ones who need LOV/PTD protection most.
Your Action Plan: Insurance Protection That Actually Pays Claims
Sophomore/Junior Year: Engage legal counsel to evaluate draft projection potential. If you project as a first-round pick (NBA, WNBA, MLB) or first three rounds (NFL, NHL), begin insurance planning immediately.
6-12 Months Before Senior Season: Obtain PTD qualification through NCAA evaluation. Request policy specimens from multiple insurers. Retain legal counsel to review and compare policy terms. Negotiate removal of harmful exclusions. Structure tax-efficient policy ownership.
3-4 Months Before Senior Season: Complete insurance applications with legal guidance ensuring proper disclosure. Secure binding coverage effective from first competition date—not some later “inception” date. Finalize premium financing through NIL collectives, private donors, or personal loans.
Throughout Senior Season: Document all injuries, medical treatments, and insurer communications. Maintain proper mitigation efforts. Notify legal counsel immediately if injuries affect draft projections.
Post-Injury: Engage legal representation immediately if career-altering injuries occur. Document causal connections between injuries and draft position decline. File proper claim documentation. Prepare for insurer denial tactics with attorneys experienced in insurance bad faith litigation.
The Bottom Line: LOV Insurance Without Legal Representation Is Worthless
The difference between Jake Butt receiving $543,000 and Marqise Lee receiving nothing wasn’t luck. It was proper legal representation understanding LOV/PTD insurance complexities, application traps, policy negotiations, and claim filing requirements.
Athletic compliance departments lack the insurance law expertise, NFL experience, and negotiation leverage necessary to protect athletes’ financial futures. Well-intentioned university administrators cost athletes millions by mishandling coverage decisions they’re completely unqualified to make.
Don’t let university compliance departments destroy your financial protection. LOV/PTD insurance purchased without experienced legal counsel is worthless exactly when you need it most—after career-altering injuries devastate your draft stock and professional earning potential.
Contact us directly to discuss Loss of Value and Permanent Total Disability insurance strategy before purchasing coverage or after suffering injuries affecting draft projections. Our combined experience as attorneys and NFL agents protects college athletes from insurance industry tactics that destroy financial futures.
Timothy Shields, Ed.D., Esq. Partner/Business Unit Leader, Data Privacy & Technology | NFL Agent Kelley Kronenberg Fort Lauderdale, FL (954) 370-9970 tshields@kelleykronenberg.com
Robert DiMarco, Esq. Partner, Sports, Media & Entertainment Law | Former NFL Contract Advisor Kelley Kronenberg Fort Lauderdale, FL rdimarco@kelleykronenberg.com
About the Authors:
Timothy Shields
Partner/Business Unit Leader, Data Privacy & Technology
Kelley Kronenberg-Fort Lauderdale, FL.
(954) 370-9970
Email
Bio
Timothy Shields holds a Doctorate in Education and Juris Doctor, serves as Partner and Business Unit Leader for Data Privacy & Technology at Kelley Kronenberg, and is a certified NFL agent. He specializes in representing college athletes in Loss of Value insurance negotiations, NIL matters, and coverage disputes involving career-altering injuries.
Robert DiMarco
Partner, Sports, Entertainment & Media
Kelley Kronenberg-West Palm Beach, FL.
(800)484-4381
Email
Bio
Robert DiMarco is a Partner in Kelley Kronenberg’s Sports, Media & Entertainment Division and former Certified NFL Contract Advisor (2017-2023). He successfully negotiated over $15 million in NFL player contract salaries and millions in marketing/endorsement contracts, represented 20+ players on NFL and CFL rosters, and consulted on multiple injury settlement grievances and NFLPA arbitration matters.